Meridiam’s blended finance model contributing to new records in net new institutional flows into infrastructure funds

While traditional assets are going through a rather hard time in a pressured market, there is one asset class that never had it so good in 2018: infrastructure.

According to data from Preqin, in 2018, private-equity firms collectively raised $68.2 billion in the first three quarters of the year, up 18% over the same period in 2017 and were already surpassing the $66.2 billion they amassed in all of 2016.

In a must-read article - published in the Q1 2019 issue of Revue Analyse Financière(N°70) - M. Nicolas J. Firzli, Director General of the World Pensions Council (WPC) comes back on the rise of this “strategic asset class par excellence”.

Among different trends, he highlights the essential part financial innovation and co-investment play in the development of the asset class. Mentioning blended finance, he focuses on the impact Meridiam, the European Bank for Reconstruction and Development (EBRD) and Multilateral Investment Guaranteee Agency (MIGA) had in Turkey through a unique jointly-structured credit enhancement structure.

Together they enabled Moody’s to assign a Baa2 rating which was two notches above the rating of Turkey at the time. Later on, it also led to the mobilization of worldwide investors including the IFC (WBG) and France’s Proparco.